The National Association of Realtors reports that the U.S. residential real estate market is in the midst of a healthy recovery as the economy and the nation’s property wealth continues to improve. Total existing home sales for February 2013 were 10.2% above last February’s levels, which marked the 20th consecutive month for year-on-year transaction volume growth. Inventory is also up and the value of homes has increased by $1.4 trillion over the last year, which is a good sign that even more people will be entering the market as the spring home-buying season gets underway. For more on this continue reading the following article from Property Wire.
A healthy recovery is underway in the US housing market with the latest figures from the National Association of Realtors showing that sales have now been above year ago levels for 20 months in a row.
Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, increased 0.8% to a seasonally adjusted annual rate of 4.98 million in February from an upwardly revised 4.94 million in January, and are 10.2% above February 2012. February sales were at the highest level since the tax credit period of November 2009.
Lawrence Yun, NAR chief economist, said the conditions for continued housing growth are improving. ‘Job growth in the improving economy and pent up demand are causing both home sales and rental leasing to rise. Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable,’ he said.
‘The only headwinds are limited housing inventory, which varies greatly around the country, and credit conditions that remain too restrictive,’ he added.
Total housing inventory at the end of February rose 9.6% to 1.94 million existing homes available for sale, which represents a 4.7 month supply at the current sales pace, up from 4.3 months in January, which was the lowest supply since May 2005. Listed inventory is 19.2% below a year ago when there was a 6.4 month supply.
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The national median existing home price for all housing types was $173,600 in February, up 11.6% from February 2012. The last time there were 12 consecutive months of year on year price increases was from June 2005 to May 2006. The February gain is the strongest since November 2005 when it was 12.9% above a year earlier.
‘A strong rise in home values is contributing to housing wealth recovery, which has risen by $1.4 trillion in the past year and looks to top that increase this year. The extra consumer spending arising from growth in housing wealth is expected to be $70 billion to $110 billion this year,’ explained Yun.
Distressed homes, that is foreclosures and short sales, accounted for 25% of February sales, up from 23% in January but down from 34% in February 2012. Some 15% of February sales were foreclosures, and 10% were short sales. Foreclosures sold for an average discount of 18% below market value in February, while short sales were discounted 15%.
First time buyers accounted for 30% of purchases in February, unchanged from January and below the 32% recorded in February 2012. All cash sales were at 32% of transactions in February, up from 28% in January. Investors, who account for most cash sales, purchased 22% of homes in February, up from 19% the previous month.
‘There was an upward bump in the shares of investor and all cash closed purchases in February. These sales result from purchase offers during the holidays when shopping activity by traditional home buyers slows, but investors, who typically pay cash, remained active. This is a seasonal pattern, but we’re now seeing a general increase in buyer traffic, which is 25% above a year ago,’ said Yun.
Single family home sales slipped 0.2% to a seasonally adjusted annual rate of 4.36 million in February from an upwardly revised 4.37 million in January, but are 8.7% above February 2012. The median existing single-family home price was $173,800 in February, which is 11.3% higher than a year ago.
Existing condominium and co-op sales rose 8.8% to an annualised rate of 620,000 in February from 570,000 in January, and are 21.6% above the 510,000 unit level a year ago. The median existing condo price was $172,500 in February, up 13.9% from February 2012.
Regionally, existing home sales in the Northeast fell 3.1% to an annual rate of 630,000 in February but are 8.6% above February 2012. The median price in the Northeast was $238,800, which is 7.6% above a year ago.
Existing home sales in the Midwest fell 1.7% in February but are 12.9% above a year ago. The median price in the Midwest was $129,900, up 7.7% from February 2012.
In the South, existing home sales increased 2.6% in February and are 14.9% above February 2012. The median price in the South was $150,500, up 9.3% from a year ago.
Existing home sales in the West rose 2.6% in February and are 1.7% above a year ago. With limited choices and multiple bidding, the median price in the West rose to $237,700, which is 22.7% above February 2012.
This article was republished with permission from Property Wire.